Cma Cautions Will Writing And Legal Service Providers As New Guidance Launched
10th October 2024
CMA issues letters to businesses alongside new guidance following an investigation into unregulated providers of will writing, online divorce and pre-paid probate services.
The Competition and Markets Authority (CMA) is taking action to protect the growing number of UK consumers who are opting for alternatives to high street solicitors when making a will or getting divorced. Businesses which provide these unregulated legal services are a growing part of the legal sector and it is crucial they understand and comply with their consumer protection obligations. People buying these services need to be sure they are getting a fair deal.
The CMA has written to seven providers of unregulated legal services cautioning them against using particularly concerning practices such as aggressive upselling, the refusal of refunds and failing to respond to complaints.
Those who receive a letter should acknowledge it and act on any recommendations to review and revise their contract terms and practices. With the CMA set to receive stronger enforcement powers from next spring, if concerns are not addressed, the businesses could face a formal investigation.
As these types of services are not purchased very often, the CMA is concerned that consumers may not have a clear idea of what they may be expected to pay or the different options available to them. So, to help boost compliance levels across unregulated legal services, the CMA is also issuing new tailored guidance for businesses in the sector. This follows a consultation which received widespread support from consumer bodies, trade associations and the firms offering these services.
To complement the guidance for businesses, the CMA has published consumer guides for people making a will or going through a divorce. The significant consumer risks associated with pre-paid probate services are also highlighted.
Hayley Fletcher, CMA's Interim Senior Director for Consumer Protection, said:
Alternatives to conventional high street law firms can offer convenient services for people - and when day-to-day budgets are already under pressure, they can be a more cost-effective option.
Those offering these types of legal services often meet their customers at some of the most challenging times in life, so it's particularly important that a difficult time is not made harder by misleading or unfair practices.
Our new guides will help empower consumers to ask businesses the right questions before they buy and give businesses an opportunity to get their house in order.
To ensure they comply with the law, we expect businesses in the sector to read the new guidance and make the necessary changes to their terms and practices. Those who don't could face enforcement action.
Guidance for unregulated legal service providers
The new guidance explains how businesses can ensure they:
draft fair terms and conditions and provide consumers with the information they need to make informed decisions
provide services with reasonable care and skill
use sales practices that are not misleading or aggressive
To raise business awareness of the CMA's new guidance, an open letter has been sent to providers and published online. The CMA will continue to monitor the sector and expects to conduct a formal compliance review in due course.
Guides for consumers
The CMA's new guides for consumers outline the options available when choosing a will writer or a divorce service provider, including the key things people need to keep in mind when buying these services and the potential sources of help if things go wrong after purchase.
Consumers are cautioned to think carefully before buying pre-paid probate plans as they come with significant consumer protection risks, including that the company could cease trading before the consumer’s death. A consumer warning on pre-paid probate services is already available via the Financial Conduct Authority and sets out the key issues for consumers to be aware of in relation to these services.
More information can be found on the unregulated legal services case page.
The CMA’s work in this area relates to consumer protection law, which applies across the UK. The separate laws relating specifically to wills, probate and divorce and the provision of legal advice in those areas differ across the nations of the UK:
In England and Wales, only certain legal services (‘reserved legal activities’) are restricted to regulated legal services professionals (such as solicitors or chartered legal executives). Reserved legal activity is a defined term in the Legal Services Act 2007.
In Scotland, certain legal services are restricted to professionals authorised to conduct those services based on the qualification they hold (such as solicitors, advocates and certain other professionals including commercial attorneys, notaries public and conveyancing practitioners). They are subject to statutory regulation: see Section 32 of the Solicitors (Scotland) Act 1980. Note that the Regulation of Legal Services (Scotland) Bill is currently before the Scottish Parliament, which if enacted will affect the regulation of legal professionals in Scotland.
Similarly, in Northern Ireland, certain legal services are restricted to qualified persons such as solicitors: see Article 23 of the Solicitors (Northern Ireland) Order 1976.
The focus of the new guidance is unregulated providers, where the additional requirements of professional regulation do not apply. However, regulated providers must also meet their legal obligations including compliance with consumer law.
The CMA has a range of enforcement powers under consumer protection law, and these are shared with other bodies, such as local Trading Standards Services.
This consumer enforcement investigation was initiated by the CMA in July 2023 to protect consumers following complaints about unregulated providers offering will writing, online divorce, and pre-paid probate services. Since then, the Digital Markets, Competition and Consumer Act 2024 has received royal assent. When relevant provisions come into force, the CMA itself will be empowered to determine whether consumer law has been breached and will have the ability to impose fines and order firms to pay compensation to affected consumers.
The providers of unregulated legal services that have received one of the seven advisory letters from the CMA will not be named.
For the links mentioned on this page go to
https://www.gov.uk/government/news/cma-cautions-will-writing-and-legal-service-providers-as-new-guidance-launched
